Circular Business Models in the Fashion Industry

If you have been reading about sustainability in fashion and other products, you might have heard of the word ‘circular’ or ‘closed-loop’. Very briefly, a circular economy or circular business model means the products do not produce (in the production phase) or become waste, and the raw materials are being used over and over again. A more elaborate explanation of what exactly is a circular economy, can be found in this article. 

Most brands are currently working in a linear ‘take-make-dispose’ pattern. Other ways to describe this could be ‘single-use fashion’ or ‘throw away fashion’. This is a sequel of the fast fashion system, which allows consumers to buy fashion for low prices. To make this possible, brands and manufacturers try to keep the production price as low as possible, and given it is possible to buy a shirt for less than €10, they are doing a good job.
However, as you might have noticed, these cheap garments do not come in the best quality, and this is widely applicable, from consumer, to labour, to environment.
They are usually produced with harmful toxins, in poorly regulated facilities with inhumane working conditions. Not to mention the overproduction that is happening, resulting in tonnes or kilo's of unsold garment left to rot in landfills. All of this results in the garments not being valuable to anyone but the retailer.

Luckily, sustainable fashion brands are on the rise and generally people are becoming more and more educated and conscious about the industry and their buying habits. Some of these brands already work with a circular system, or partly, by using closed-loop fabrics like tencel and viscose. Among other practices, sustainable brands are focussing on ethical working conditions, non-toxicity, biodegradability, and keep recyclability in mind. Being a circular brand however, is taking it one step further. When a brand is circular it is pushing a materials life-cycle meaning: reselling, renting and even repairing or refurbishing.

The companies that made fashion this affordable and attractive should now use their power and take their responsibility to make sustainability and circulatory just as attractive, or better. However, this is not easy.

Luckily, big names like H&M group are now incorporating reselling pre-owned items. It is done via a digital platform called COS Resell, and here, customers can buy and sell the COS items they are not using anymore. Nevertheless this is not a new concept. Sustainable brand, FilippaK started a second hand shop, only filled with garments of their own brand back in 2008.

Another great example of FilippaK is their repair service. If a garment is broken, it can be brought back to the store to be repaired. In addition, they have a special garment care service, which advises you on how to care for your garment to push its life cycle. Lastly, they are offering workshops (only in Stockholm) for garment repair and advice.

As we are starting to get more used to the sharing economy (e.g. AirBnB, WeShar, PeerBy) it is about time to incorporate this in the fashion industry as well. Amsterdams 'LENA the fashion library allows customers to borrow clothing, without subscription. The garments can be ordered online, but they also have a physical store. Moreover, it is more than affordable. The prices range from €0.25 a day, to €10.00 a day. The more you borrow, the less you pay. 

The same goes for jeans brand MUD. The sustainable jeans, made of recycled denim, can be bought new or leased. To lease new jeans, a consumer becomes a member and pays €9,95 for 12 months (and €8,95 for a pre-owned model). After 12 months, the jeans become yours, or, you swap it for another one.

If products can not be reused or repaired anymore, but the majority of the material is still usable, the product can be upcycled. Funky Kalakar has implemented this in their business model. Through its Go Zero initiative, you can send the brand your old shoes and bags which are then recycled and upcycled to create new pieces. To trigger consumers to bring in their unwanted goods, you receive a 15% discount on the next purchase. 

Yet, one should not forget that selling a product is a different business than making your customer bring back the garment to your store, even if they get a discount in return. To achieve this, strong customer engagement is needed. Of course, a brand could serve as a convenience, making sure the garment is picked-up, sending reminders or having it shipped for free to the store. However,  it should still be workable and profitable.

Lastely, industry observers predict that in the next ten years, fashion resale (peer to peer) will become bigger than fashion retail. For millennials and Gen Z’ers it is completely normal to resell and then resell again the clothing they got bored of. Usually, the habits of teenagers or college students is a  good indicator of where the world is going, so the younger generations are very likely to follow their lead. Currently, the most used platforms are Depop (UK) and Vinted (EU) which have offers ranging from cheap fashion to designer chique.

Even though these examples sound promising, for an existing mass producing brand, shifting from linear ways of production to circularity is easier said than done. Still, the majority of garments sold by fast fashion companies are made of unsustainable fabrics blends which are not recycled, let alone thinking about how they are produced.
Not to mention; the overproduction. According to Vanessa Rothschild: ‘For circular supply chains, at the most basic level we need to produce only what we can sell; we need to adjust supply and demand’.
Until then, we can be happy that companies like H&M group have the capital and power to invest in startups making a difference. Renewcell is one of these investments, this company is developing a new material called Circulose, made by gently recovering cotton from worn-out clothes.

How does Kleiderly contribute?  

Recycling of existing resources is an essential part of circularity and creating a more sustainable industry. This is why Kleiderly has made it its mission to reduce the global fashion footprint by recycling clothing waste into new and recyclable plastic alternatives that solve two problems at once: clothing waste and the use of oil-based plastic.

Sources:

https://goodonyou.eco/circular-fashion-brands/

https://motif.org/news/circular-fashion-economy/

https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/The%20Next%20Normal/The-Next-Normal-The-future-of-fashion